Changes
in Federal Income Tax Withholding Tables, Earned Income Tax Credits and
Social Security/Medicare Deductions for the Year 2003

Purpose

To advise agencies of changes in
withholding allowances and maximum Social Security Tax.

Eligible
Employees

All employees.

Effective
Dates

New rates will be reflected in the
Institution checks dated January 09, 2003 and Administration checks dated
January 15, 2003.

Tax
Tables

The value of a withholding allowance has
been increased to $58.65 weekly, $117.31 biweekly, $254.17 monthly and $3,050.00
annually. To request a copy of Circular E, Employer's Tax Guide, contact the IRS
at the toll-free number 1-800-829-3676 or visit
their website at www.irs.ustreas.gov to
view this publication.

The New York State Payroll System calculates taxes based on the annual table.

Advances Payment of Earned Income
Credit

In 2003, employees whose earned income is
less than $29,666 or $30,666 if married filing jointly may be eligible for the
advance payment of the Earned Income Credit (EIC), with a maximum credit of
$1,528. The new 2003 tables for calculating the credits are also included in the
Circular E.

Eligible employees must complete a new W-5, Earned Income Credit Advance Payment
Certificate each year. Copies of the forms may be obtained from IRS.

Social Security-Medicare
Deductions

The 2003 Social Security Tax will be
calculated at 6.2% on the first $87,000 of wages resulting in a maximum Social
Security tax deduction of $5,394.00. The 1.45% Medicare tax will apply to all
taxable wages, as there is no wage cap.

Questions

Questions regarding this bulletin may be directed to the Payroll Deductions mailbox.